The Implementation of Chapter II Preventive Measures of United Nations Convention Against Corruption [UNCAC]
Organizations in Corporate & Government
e Learning – Implementation – Assessment
1. Anti-Corruption – Preventive Measures – UNCAC:
The Economic Times – 30th November 2010 reports, under the banner ‘India to ratify UN convention against corruption soon’ – India is all set to ratify the global convention against corruption seven years after the treaty came into being, taking on an obligation to check corruption in private sector amid the unravelling of multiple scams in the country.
There are two points that shall be noted:
i. Seven years after the treaty came into being:
UNCAC is one of the finest document ever crafted, for it has some clauses under Chapter II Preventive Measures that makes it feasible for better Governance of a difficult subject like Corruption that Kofi Annan rightly observes: “Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish.”
It is seven years since UNCAC emerged from UN but one shall not be surprised if it goes in the same way as FCPA [Foreign Corrupt Practices Act] and OECD Anti-Bribery Convention 1998 and 2008 initiatives from 1977. It has taken seven years for India to ratify the Treaty that more than 140 countries have been signatories as Member States.
ii. an obligation to check corruption in private sector.
India ratifying the Treaty makes the Private Sector obliged to follow suit and thereby report on the steps taken to initiate the process of introducing UNCAC. Every Organization is duty bound to understand every clause of UNCAC.
2. Shift focus from Balance Sheet to Governance
OECD in 1997 considered: “that bribery is a widespread phenomenon in international business transactions, transactions, including trade and investment, which raises serious moral and political concerns, undermines good Governance and economic development, and distorts international competitive conditions; that all countries share a responsibility to combat bribery in international business transactions;” In January 2008 “Consultation Paper Review of the OECD Instruments on Combating Bribery of Foreign Public Officials in International Business Transactions Ten Years after Adoption” was released inviting comments on its proposal.
Members from internal – external Accounting and auditing firms, legal experts, Multi-lateral organizations, Non- Governmental organizations, Private Sector, Prosecutors and Trade Unions totaling 35 organizations responded to give their opinion.
The study by IBCM reveals IASB – International Accounting Standards Board is the only organization internationally that has a set modicum of discipline enforced through its several standards complied by its affiliated institutes globally. None other profession has. The Audit firms participating in the OECD commented upon the said consultation paper:
1. It is management‘s responsibility, with the oversight of those charged with Governance, to ensure that the entity‘s operations are conducted in accordance with laws and regulations,
2. The responsibility for the prevention and detection of non-compliance rests with management, and
3. “We believe prevention is the first line of defense to combat any form of corruption and prevention begins with awareness. Awareness throughout all levels of Government that requesting and/or accepting bribes is illegal must be promoted by the Parties to the Convention. Further, enforcement efforts by Government should be adequately robust.”
Study by IBCM concluded:
a. The two earlier quoted notes from OECD is worth repeating here:
1. One key issue going forward will be the effectiveness of new compliance systems in providing real-time reports of (attempted) corrupt activities to (i) regulatory and (ii) investigation agencies. Stopping the transaction is a primary function of such a compliance system.”
2. “However, it should be recognized that one cannot monitor the same [antibribery] instruments ad infinitum without decreasing the effectiveness of such monitoring and contributing to monitoring fatigue.”
b. IBCM Concludes:
The first one indicates the real-time reports to regulatory and investigative agencies and the second the decreasing effectiveness of such monitoring leading to fatigue.
These three issues raised above: i. Real-time monitoring, ii. Monitoring fatigue and iii. People Participation, are addressed squarely by:
a. Governance is feasible for only one day, i.e. today,
b. Study of Cost Consequence shall have increasing effectiveness of monitoring and
c. People Participation
By shifting focus from Balance Sheet to Governance the organization has a good command over the various issues other than finance.
3. HACCP of Governance
IBCM analysis is unique for delivery of the three criteria set for a functional Governance. Governance Statement of Accountability Reporting to the stakeholders should cater similar to a passenger in an aircraft who is provided with the video display of the real-time information on the flight path, a map covering the route, the position on dot, altitude, cruising speed, distance to destination, time from origination point and time to reach the destination.
Corruption Monitoring is of such a nature. HACCP, the Hazard Analysis and Critical Control Points, as applicable to Food Industry is applicable to every organization. Study of Cost Consequence is made feasible by Real-Time Monitoring that before the bubble bursts action could be initiated to contain the damage. By the three criteria set, question of a BP fiasco, Lehman Bros or CWG or 2G spectrum scandals can never arise. That’s Governance – Pure Energy.
It is made feasible by equating every object sentient or insentient as a substance with quality integrated and action without being separated. Every substance has the identical way of creation and unique way of action. IBCM analyzes and identifies the area of inactivity in each substance and provides an Index of Inactivity as the Statement of Accountability by five Resource Areas – People represented by Ethical Responsibility and the rest i. Technology, ii. Operational Force, iii. Managerial Force and iv. Finance represented by Fiscal Responsibility. This is equated to every single process area by defining Intangible.
4. e Learning, Implementation and Assessment
i. e Learning: The concept as enunciated by IBCM is simple to learn and implement. IBCM provides the e Learning program for all to learn the concept. IBCM analysis confirms Article 13 Participation of Society as pivotal to the delivery of Preventive Measures undertaken. Therefore it is an absolute must that every employee of the organization is well versed and educated in the implementation process. To facilitate the same IBCM is keen to provide the e Learning in different languages so that working class is made aware of the initiatives and form part of the implementation program.
ii. Implementation: Implementation program is available that shall identify the HACCP of Governance under UNCAC clauses. This will enable a comparability between one organization and the other enabling a performance yardstick irrespective of which industry or government it is referred to.
iii. Assessment: The organization would have created an operational force to institute preventive measures of UNCAC that assessment of the status report is done by the department force within. See IESB below
5. IESB – International Ethical Standards Board
The e Learning and Implementation process coupled with Training offered by IBCM should have created a department within the organization well versed with the Governance methodology offered by IBCM. Natural consequence of the operational force of this department by its compass and capability could be the Vigilance Organization already created within the organization.
The purpose of the book is to establish IESB. IESB shall be formed to oversee and protect the function of this department in every organization. This shall avoid the discrepancy existing among the Accounting profession who are protected as external auditors but not as internal accountants left to the mercy of the management as happened in Satyam case. It is feasible by creating the organization with firms of certifying professionals reporting directly to IESB through the country affiliated Institutes formed. The Author of IBCM could also form part as one of the certifying professional firms subject to approval of IESB.
6. IBCM – Inactivity Based Cost Management – Book of Action
IBCM went through a rigorous process of being published by a major International Publisher with reviews, blind review, peer review and external review for over 18 months before the author rejected the contract offered. The external reviewer was excellent. The author has to add to this observation: “the definition of intangible, defined for the first time and its application to the tangible substance with quality and action process clearly figured, like treating zero when found as a number on its own right, exploring into the Governance of all that matters, enabling the measurement of Governance.”
Both corporate and the government have willfully neglected Social Responsibility that those who go hungry in this world any day exceeds more than a billion. All that can be counted as achievements in this world of poverty is in the field of entertainment. This Book can be easily understood and applied to the benefit of everyone, for to declare BP or CWG fiascoes cannot occur if IBCM is applied then it must be given credence and be challenged. This is a Book of Action and shall benefit Corporate and Government alike.
The mission statement of creating IESB – International Ethical Standards Board will be achieved.
For organizations wanting to implement this scheme please be in touch. It is an exciting work I am doing at the moment is to translate IBCM into Tamil, my mother tongue that I had not written since 1962 although I do read, mainly to propagate anti-corruption drive and realizing the Ethical Responsibility. Corporate must bring in a sense of belonging by educating the majority within the company on two counts: a. Internal – Get UNCAC Chapter II Preventive Measures implemented and assessed and 2. External – Get the assessment Ranking of UNCAC Chapter II of companies that Corporate have business deal.
Jayaraman Rajah Iyer
2 thoughts on “HACCP of Governance”
Great to see others with the same importance of ethics viewpoint. I really like how you focus on ethics in a global sense. I feel that is very important for our cohesive futures because operations are undoubtedly heading towards a world scale.
Thanks for your comment. Indeed yes, it is global. When you see the brighter part of it, people are joining in from different parts of the world as I could reach you through JP’s comment on your views. I am confident we will all come together to achieve the objective of bringing in ethical values in public life, back again, wherever we are.